Board members would overhaul law, survey says.

More than half of all corporate board members who took part in a recent survey would repeal or overhaul the landmark Sarbanes-Oxley Act.

Passed in 2002 in the wake of a spate of financial scandals, the Sarbanes-Oxley Act was the most sweeping securities legislation since the Great Depression. It created rules intended to hold senior executives accountable for financial irregularities, mandated greater scrutiny of accountants and required that auditors must certify the adequacy of companies' internal controls.

The legislation has come under intense fire from the U.S. Chamber of Commerce for being too costly for small public companies.

A survey of 1,200 board members released last week by executive search firm Korn/Ferry International found that 58 percent of the respondents thought the Sarbanes-Oxley Act need to be changed or abolished. Seventy-two percent thought the regulations have made corporate boards too cautious and have not been a catalyst for improved corporate governance.

Charles King, head of Korn/Ferry's global board services practice, admitted that "gross corporate misconduct" necessitated the passage of Sarbanes-Oxley, but he claims it went too far.

"Many directors believe boards have become exceedingly wary and are not taking necessary risks to drive company growth," he said. "These directors are demanding reform."

Some shareholder advocates oppose any overhaul. Those groups have called for restrictions on stock options awarded to executives, increased usage of pay-for-performance standards and a prohibition on the issuance of rosy "pro forma" reports prior to the release of actual earnings.

The U.S. Chamber of Commerce has set up a blue-ribbon commission to recommend ways to overhaul the act, though the panel is holding private meetings and will release its findings early next year.